WRITTEN STATEMENT OF THE NATIONAL PETROCHEMICAL & REFINERS ASSOCIATION (NPRA) AS SUBMITTED TO THE SUBCOMMITTEE ON ENVIRONMENT AND THE ECONOMY

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1 WRITTEN STATEMENT OF THE NATIONAL PETROCHEMICAL & REFINERS ASSOCIATION (NPRA) AS SUBMITTED TO THE SUBCOMMITTEE ON ENVIRONMENT AND THE ECONOMY House Energy and Commerce Committee on H.R. 908, Full Implementation of the Chemical Facility Anti-Terrorism Standards Act March 31, 2011

2 NPRA, the National Petrochemical & Refiners Association, appreciates the opportunity to submit this statement on H.R. 908, Full Implementation of the Chemical Facility Anti-Terrorism Standards Act. America s refining and petrochemical companies play a pivotal role in ensuring and maintaining the security of America s energy and petrochemical infrastructure. Nothing is more important to our member companies than the safety and security of our facilities. Our members have worked extensively with the Department of Homeland Security and have invested millions of dollars toward strengthening facility security. NPRA strongly supports the current Chemical Facility Anti- Terrorism Standards (CFATS) and encourages Congress to make the current program permanent, which would allow both DHS and industry the time needed to fully implement the CFATS program. NPRA is a trade association representing high-tech American manufacturers of virtually the entire U.S. supply of gasoline, diesel, jet fuel, other fuels and home heating oil, as well as the petrochemicals used as building blocks for thousands of products vital to your daily life. NPRA members make modern life possible, meet the needs of our nation and local communities, strengthen economic and national security, and provide jobs directly and indirectly for more than 2 million Americans. Maintaining a high level of security has always been, and remains, a top priority at America s refineries and petrochemical manufacturing plants. Operators of these facilities are fully engaged in the maintenance and enhancement of facility security. Many of our member companies have long operated globally, often in unstable regions overseas, where security is an integral part of providing for the world s energy and petrochemical needs and hence have extensive knowledge of how to successfully implement site security programs. In the aftermath of the September 11 attacks, our member companies realized that additional and unconventional threats must be considered in order to protect our nation s critical energy manufacturing and distribution infrastructure. In full understanding of the potential and significance of these threats, we did not wait for the adoption of new government mandates before implementing additional, far-reaching facility security measures. Instead, we immediately initiated measures to strengthen and enhance security, including: 100 percent ID verification and bag screening; comprehensive vehicle inspections; limitations on visitor access and tours; and, a reduction in plant access points to minimize risk. Furthermore, we have been active participants in the Chemical Sector Security Council and the Oil and Natural Gas Sector Security Council, as well as many other DHS-sponsored efforts. Since the creation of the current CFATS regulations, our member companies have submitted their Top Screens, Site Vulnerability Assessments (SVAs) and Site Security Plans (SSPs) in accordance with DHS timetables and are awaiting approval of those submissions. Many NPRA members manufacturing plants have been subject to Pre-Authorization Inspections (PAIs) and await final tiering status. Throughout this process, we have developed productive and collaborative working relationships with DHS and other key federal agencies, and have strengthened relationships with state and local law enforcement offices. These relationships ensure that all parties obtain and exchange information critical to the maintenance of infrastructure security, enabling all to respond rapidly to terrorist threats. 2

3 We firmly believe that the current CFATS program has been successful, but needs to be made permanent without the addition of any extraneous provisions. CFATS must be allowed to be fully implemented by DHS before any amendments to the program are considered. As a result of the CFATS program, there has been a surge in security awareness across all industries and among industry employees. The operators and employees of our manufacturing plants and our distribution facilities are now even more keenly aware of vulnerabilities at each site, potential off-site consequences and methods to reduce risks at these sites. NPRA members also report that the current regulations have helped with better chemical inventory management. In fact, many of our member companies regularly conduct security awareness training and complete Site Vulnerability Assessments to enhance security at unregulated sites that do not fall under the CFATS program. We have an excellent working relationship with DHS and have repeatedly volunteered to help the Department through activities ranging from site tours to joint training activities and serving as technical experts. In order to fully gauge the success of the current version of CFATS, however, Congress should allow for the complete implementation of the current program. Only then should Congress and DHS determine whether or not significant changes to this highly innovative program are required. Specific focus on the existing CFATS program and related security activities indicates the following: 1. America s refining and petrochemical manufacturing plants will continue to maintain and improve security operations to protect the vital network that provides a reliable supply of fuels and other petroleum and petrochemical products that are required to keep our nation strong and our economy growing. 2. Essential working relationships and information networks have been established between government security agencies and our members manufacturing facilities to exchange realtime intelligence data on security issues. These relationships allow for rapid response to terrorist and other security threats. We believe that unwarranted and potentially counterproductive revisions to this successful program could significantly alter these relationships, thus placing unnecessary obstacles in the way of the nation s overarching goals regarding homeland security. 3. We have partnered with the Department of Homeland Security on many important security initiatives and programs, including the Risk Assessment Methodology for Critical Asset Protection (RAMCAP), the Homeland Security Information Network (HSIN), Buffer Zone Protection Plans, SVAs, Site Security Plans (SSPs) and Industry Sector Councils. When reviewing the current program, NPRA and our member companies strongly caution against the inclusion of any unrelated amendments, such as inherently safer technology (IST) or increased information-sharing provisions. The following issues should be considered before any potential update of the current CFATS program is proposed. 3

4 Inherently Safer Technology (IST) IST continues to be a misinterpreted concept to those outside the field of engineering. Proponents of IST as part of security legislation believe that the only way to ensure security at chemical facilities is by reducing the amount of hazardous substances used in chemical manufacturing and processing by way of simple chemical substitution. Application of IST, however, is bound by the laws of physics and nature; a simple reduction or switch in the use of hazardous chemicals is rarely possible within the context of a specific reaction or process. NPRA members facilities are custom-built according to specifications that accommodate very specific chemical processes, and every facility in the country is different. It is usually not possible to simply substitute one chemical for another in the context of refining and petrochemical facilities. Furthermore, in terms of the reduction of certain substances, there is a serious risk of simply transferring risk to other points along the chemical supply chain thereby not decreasing risk, but simply transferring it to other areas that may not be as secure as CFATS-covered chemical facilities. IST is a conceptual and often complex framework that covers procedures, equipment, protection and, when feasible, the use of less hazardous chemicals. IST is not just a safety program; it is a process safety program that involves understanding chemical engineering and the supply chain for petroleumbased, natural gas liquids-based and other organic chemicals derived from these basic feedstocks. Its premise is that if a particular hazard can be reduced, the overall risk associated with a chemical process will also be reduced. In its simplicity, it is an intuitive concept; however, reality is not always that simple. A reduction in hazard will reduce overall risk if, and only if, that hazard is not displaced to another time or location, or does not amplify another hazard. If the hazard is displaced, then the risk will simply be transferred, not reduced. We strongly oppose the inclusion of any IST provisions in chemical security legislation. IST and chemical engineering decisions should be left to individual sites and not mandated by the federal government. Another factor that makes the implementation of an IST regulatory program unrealistic is that there are no methods with which to measure whether one process is inherently safer than another. Given this reality, DHS would not be able to measure the effectiveness of its regulations. Sharing of Information We also caution against broadening any of the information-sharing provisions in the CFATS program. Currently, security information such as Site Security Plans (SSPs), Security Vulnerability Assessments (SVAs) and security infrastructure information is kept between DHS and those at the facility who can demonstrate a need to know. Allowing broad access to this information weakens the security of the site, increases the likelihood that this information will be leaked and could lead to situations ranging from an increase in vulnerability to terrorist attacks at the site to internal threats such as theft and 4

5 diversion. It should be strongly noted that security and intelligence information has traditionally been shared on a strict need to know basis and has not been made accessible to those who do not have a need to know. There is plenty of historical evidence to support and continue limited disclosure of sensitive security and business information. While all employees should have security awareness training, detailed site security information should be strictly limited to those specific individuals with a need to know. Background Checks (Personnel Surety) Under CFATS, it is required that personnel with access to sensitive information or relevant operations be vetted against the National Terrorism Screening Database (NTSDB) no matter if the person has already been vetted by other government credentialing programs, such the Transportation Worker Identification Card (TWIC) program, the Hazardous Materials Endorsement (HME) or a host of other federal government credentialing programs. In the last two years DHS has twice proposed in the Federal Register that employees with CFAT sites would have to obtain and maintain multiple government credentials. This would be duplicative, burdensome, and costly for industry and DHS. NPRA recommends that DHS develop a new, universal federal security credential for personnel with access to sensitive information or relevant operations that meet the requirements of CFATS RBPS # 12 Personnel Surety. A possible first step toward this end would be the creation of a Critical Infrastructure Worker Identification Card (CIWIC) to replace all other federal chemical security credentials. In the interim there should be reciprocity of other federal chemical security credentials and the optional use of safety councils or trusted agents to assist sites vet contractors. Maritime Transportation Security Act Many of our member companies comply with the security requirements under the Maritime Transportation Security Act (MTSA), a program administered by the U.S. Coast Guard (USCG). The Coast Guard and NPRA members have worked together closely to achieve the security goals of MTSA. If CFATS and MTSA are harmonized, the work that sites have carried out to comply with MTSA must be recognized. Further, MTSA sites should not be subject to dual inspections and the USCG should continue its role at traditional MTSA sites. Pipelines Any new CFATS legislation should exclude pipelines, as they are regulated by the Transportation Security Administration s Pipeline Security Division. Exercises, Drills and Training Red team drills are unnecessary for CFATS sites and may lead to unintended injuries and tension in surrounding communities. However, we do support security training drills with local law enforcement, emergency response personnel and surrounding communities that would allow all parties to be better prepared for a terrorist event. We support, at a minimum, security awareness training for employees at CFATS sites. More detailed and specific training may be warranted on a need to know site- specific 5

6 basis that should be determined by the facility or corporate security director. Training that would describe details of a specific SVA or SSP should only be for those with a need to know. Information contained in the SVAs or SSPs are critical to the security of the site and the information contained within these plans needs to be treated with the utmost care. Conclusion America s refiners and petrochemical manufacturers are committed to implementing and complying with CFATS. We do not oppose a reasonable review of the current program; however, the existing program is still developing and should be allowed to be fully implemented before it is significantly altered. There are numerous implementation issues that need to be clarified before any new requirements are added, including: personnel surety, material modifications, and alternative security plans. Most importantly, with very few actual authorization inspections having been done it would be extremely poor public policy to add additional requirements to a program that has not had the chance yet to apply lessons learned from actual inspections. The program should be made permanent to provide regulatory certainty and a stable security framework for the future. We urge the Committee to reject any attempts to significantly amend the current program particularly with provisions that would undermine both security and economic development. NPRA appreciates the opportunity to submit this statement for the record and stands ready and willing to work with the Committee and Congress towards the implementation of sound, responsible, effective chemical facility security policy. 6